Monday, February 15, 2010

Developing a new business line in a large corporation - looking for case studies

A large corporation in high volume, low margin business had made a strategic decision at the board level to start a high margin business. Start up operations within a large parent face unique dynamics. I am looking for case studies of what the new ventures had to do, culturally and organizationally, to be successful in the larger corporation. An example of this kind of a new venture could be a hardware company building a new venture focused on software solution.

I am looking for details on what the fledgling organization has to do to succeed: (a) building its own identity, (b) creating an excitement for the group, and (c) standing out from the rest of the organization but preventing it from becoming isolated and marginalized.

The fledgling organization face at least three major issues - proving legitimacy, resource contention, and passive resistance or organizational inertia.

The new venture has to sell the internal and external stakeholders of the viability and longevity of and the organizational commitment to the idea. The internal (peer organizations) and external stakeholders (including customers and partners) have to understand that the fledgling organization is not the idea of the month but is legitimate and is going to support the solution for the longer term.

The new venture is often short of resources and must compete with other established departments within the organization that are requiring the resources for "proven" tasks.
The new venture also has to enthuse other departments and reduce their perception of threat from the innovation and the change the new venture augurs. Without that the new venture either faces indifference or worse, resistance from the other parts both inside and outside the corporation. 
The new venture has to build the bridges but also gain an independent identity to overcome these three organizational dynamics.

The team that created Novopen, the first user-friendly insulin delivery solution, with in Novo Nordisk comes to mind but I don't have much details on the things that Novo Nordisk did to make the team successful.

I am interested in how (how the team succeeded) rather than whether (whether a low margin, high volume business should setup a separate organization to create high margin business).

Karthik

1 comment:

  1. One good source is THE INNOVATOR'S SOLUTION, by Clayton Christensen and Michael Raynor. - Tom

    ReplyDelete